SEBI through its notification dated 11th March 2025 (reference number: SEBI/LAD-NRO/GN/2025/235) has significantly amended the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”), broadening the definition of Unpublished Price Sensitive Information (“UPSI”) and refining rules for trading window closure – steps aimed at strengthening India’s insider trading compliance framework.
Why this matters
SEBI’s amendments expand the scope of what must be treated as UPSI, tighten controls on disclosures, and impose clearer obligations on listed companies to maintain governance and investor confidence.
Key Amendments to UPSI Definition
The definition of UPSI under Regulation 2 (1) (n) of PIT Regulations has been expanded to include the following new items:
1. Changes in Key Managerial Personnel: Changes in KMP(excluding superannuation, end of term, or resignation), in key managerial positions;
2. Change in Ratings: Any change in the listed entity’s ratings, excluding ESG (Environmental, Social, and Governance) ratings;
3. Fundraising Plans: Any proposals relating to fundraising that the listed entity intends to undertake;
4. Material Agreements: Any agreement which may influence the management or control of the listed entity;
5. Fraud, Defaults, or Arrests: Instances or fraud, defaults or arrests involving the listed entity, its promoters, directors, key managerial personnel, subsidiaries, or arrests of key individuals (whether within India or abroad);
6. Resolution Plans/ Restructuring: Any resolution plans, restructuring, or one-time settlements related to loans or borrowings from banks or financial institutions relating to the listed entity;
7. Corporate Insolvency: Corporate Insolvency proceedings, including admission of a winding-up petition, or the initiation of the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016;
8.Forensic Audits: The initiation of forensic audits for detecting misstatements, misappropriation of funds, or diversion of listed entity’s resources, and the receipt of the final audit report;
9. Regulatory Actions: Actions or orders passed by regulatory, enforcement, or judicial bodies (whether in India or abroad) against the listed entity or its key personnel;
10. Litigation Outcomes: Outcomes of any litigation or dispute that may have an impact on the listed entity;
11. Guarantees and Indemnities: The provision of guarantees, indemnities, or surety by the listed entity, for any third-party obligations, if not in the ordinary course of business;
12. Suspension of Key Licenses: The granting, withdrawal, cancellation, or suspension of any key licenses or regulatory approvals;
[Explanation 2 to Regulation 2 (1) (n) clarifies that listed entities shall identify the events which qualify as ‘UPSI’ based on the materiality guidelines/ materiality as specified under paragraphs A and B of Part A of Schedule III of the SEBI LODR Regulations.]
Changes to trading window closure
The amendments also revise the rules for closure of the trading window under Clause 4 (1) of Schedule B of the PIT Regulations. Notably, exceptions may apply when UPSI originates externally, allowing the Compliance Officer to determine if Designated Persons are unlikely to possess such UPSI.
Regulation 3 (5) has also been amended to require that any UPSI received from outside the listed entity be also recorded into its structured digital database within 2 (two) calendar days of such receipt.
Actions for Listed Entities
With the revised definition of UPSI, listed entities must promptly update their insider trading policies and fair disclosure codes to incorporate the newly included items. Entities should also implement procedures for handling UPSI received from outside the organisation, including ensuring timely recording in the structured digital database. Additionally, companies should conduct staff training on the updated compliance obligations and review internal controls around trading window management.
International Parallels: SEBI’s expansion of the UPSI definition and the new requirements for recording external UPSI align Indian regulations with global best practices. For instance, the EU’s Market Abuse Regulation (MAR) mandates broad insider lists and disclosure of all price-sensitive information, while the US enforces strict controls over material non-public information (MNPI) under SEC Rule 10b5-1. Similarly, markets like the UK, Australia, and Singapore require prompt disclosure of inside information and robust internal controls to track its flow. By adopting these amendments, SEBI is reinforcing transparency standards comparable to those in major global markets, aiming to bolster investor confidence and regulatory consistency.
